India hiked its military spending by 12.43%. Finance Minister Arun Jaitley allocated $38 billion in the budget for 2014-15.
Increase in capital expenditure by $831 million may not necessarily mean more money for weaponry acquisitions compared to February’s interim Budget. The day-to-day expenses and salaries together itself amount to $22 billion.
The $15.7 billion now allocated for the defense capital expenditure has been divided under various parts. Under the “aircraft and aero-engine component”, the Indian Air Force (IAF) has been allocated $2.7 billion. The Army and IAF have been allocated $2.5 billion and 2.5 billion while 2.1 billion has been allocated for modernization of the naval fleet.
From the hike in capital expenditure, $166 million has been allocated for development of the railway system in border areas. $665 million could be utilized for part of the DRDO’s research and development activities including acquisition of heavy machinery and infrastructure development.
A majority of the cost outlay will be spent for existing commitments leaving less space for newer procurements. The armed forces are struggling to maintain existing weapon systems and platforms, leave alone inducting new ones.
There are several proposed deals still to be inked in the current financial year 2014-15 that began from April 1 this year. The most important deals include mega-deal for 126 (MMRCA) combat aircraft for the IAF, attack helicopters for the IAF, the ultra-light howitzer (ULH) artillery gun deal for the Army, and multi-role helicopters for the Navy.
This also points out the unyielding financial condition being faced by the government.
India will increase foreign direct investment (FDI) in defense from 26% to 49% to attract international companies to set up manufacturing units in India. However, the move disappointed many industry analysts who were expecting up to 74% FDI
Indian Navy will receive its first indigenous P15A, Kolkata class destroyer today. The destroyer completed delivery acceptance trails (DAT) and will be commissioned soon
Indian M0Ds defense acquisition council is expected to approve purchase of Apache attack and Chinook heavy-lift choppers worth $2.5 billion once they meet in Delhi on July 19, according to media reports
After streamlining industrial licensing on defense equipment last week, India has issued a set of security guidelines for all licensed defense equipment manufacturing companies. According to the Indian Express newspaper, the guidelines are to elaborate physical defense systems
Indias Ministry of Commerce and Industry has streamlined various defense items requiring licensing to boost defense production. The notification released on June 26, 2014 has restricted the conditions of defense license to Tanks and other armor fighting vehicles, defense aircrafts, space craft and parts thereof, warships of all kinds and arms and ammunition and allied items of defense equipment, parts and accessories
Indias $20 billion deal to buy Rafale fighter jets may not conclude this financial year as negotiations are still to be completed without which budgetary provision cannot be made. The Indian budget for fiscal 2014-15 is scheduled for July during which a higher allocation for defence as compared to last year could be made
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